Zee Group promoters said to appeal against India market regulator ban

The Securities and Exchange Board of India (SEBI) banned Mr. Chandra and Mr. Goenka for a year, saying they were actively involved in diverting company funds to the group’s related entities.
| Photo Credit: Special Arrangement

Zee Group’s promoters Subhash Chandra and Punit Goenka moved the Securities Appellate Tribunal (SAT) on June 12, challenging the Indian markets regulator’s order that banned them from holding board positions in listed companies, sources privy to the information said.

The bench has posted the matter for further hearing on June 15, the sources said.

The Securities and Exchange Board of India (SEBI) on June 12 banned Mr. Chandra and Mr. Goenka for a year, saying they were actively involved in diverting company funds to the group’s related entities.

Zee did not immediately respond to Reuters’ request seeking comment.

Shares of Zee Entertainment fell as much as 7% in early trading as worries resurfaced over a potential delay of its merger with the local unit of Japan’s Sony Corp..

Sony did not immediately respond to a Reuters request seeking comment.

Zee’s board is reviewing the SEBI order, Chairman R. Gopalan said in a statement, adding that the company is seeking “appropriate” legal advice before its next move.

SEBI’s ban could further delay the merger between Zee and Sony, especially with Mr. Goenka slated to become the managing director and chief executive of the merged entity.